It has been this way for many years in most states. However, now a handful of states have enacted “no fault” laws in order to free up the court systems and save time/money for insurance companies and consumers in general.

However, the compensated driver does not retain the right to sue for additional damages after they have been indemnified, or paid back, for their insurance claim.

Some states allow the victim to also file a lawsuit if a certain dollar threshold or injury severity, or “descriptive” threshold are met as a result of the accident.

Monetary threshold states currently include HI, KS, KY, MA, MN, ND and UT. The monetary threshold may be as low as $2,500.

Additionally, serious injuries also allow for lawsuits to be filed in no fault states. The injury threshold states are FL, MI, NJ and NY.

Note that property damage is not covered under “no fault” laws. In order to seek compensation for damaged property, you must deal with the insurance company of the person who caused the damage.

“Add-on” coverage is available in some states as well. This coverage allows you to purchase personal injury protection, but remains a tort system for recovery, meaning you can still sue and be sued freely. Currently, AR, DE, MD, and Washington D.C. are add-on states.

There are three unique states that allow their drivers to choose to purchase personal injury protection and waive the right to sue, or decline PIP, and stick with the good old-fashioned tort system and continue to sue each other like crazy.

One Comment

Douglas RamseyOctober 31, 2015 at 2:04 pm -

My daughter sideswiped a parked car on our street several months ago. My Mercury insurance policy totalled my daughters car, pretty incredible, 2014 Corolla good condition low miles damage not “that” bad. The car she hit was a 98 accord, pretty significant damage, that car Barely bumped an older 2002ish Tacoma which slightly jarred the car parked directly in front of it, lifting it off the ground an inch or two. Their insurance company totalled all three of those vehicles and it exceeds my 10,000 dollar liability, so Mercury insurance is telling me. I took pictures of the accident that clearly show there is no way these vehicles are totalled, the first car maybe, but no way the truck and the car in front. I understand the “carfax” thing and the car being involved in an accident drops the value, but there is NO way these cars were totalled. My daughter is a 21 yr old college student with a good driving record….any thoughts?